Something for the weekend - 11 August 2023

Well that was quite the week wasn’t it?

Yes, we’re going to talk ESPN and Penn a bit more. Unless you’re just finishing a digital detox you’ll be aware by now that Penn Entertainment is to relaunch its sportsbook under the ESPN Bet brand, pushing Barstool back into founder Dave Portnoy’s hands.?

It didn’t come cheap. Penn is committing to paying $1.5bn in cash over the ten-year term, plus a further $500m in stock. Add that to the $2.0bn paid for theScore - which provides a shiny new platform for the new brand - and over $500m for Barstool, and Penn’s investment in gaming expansion comes tops $2.5bn.?

While the likes of Caesars and DraftKings were previously mooted as potential partners for Disney’s leading sports brand, it sounds like they weren’t willing to stump up that much. Disney CEO Bob Iger said Penn “stepped up in a very aggressive way and made an offer to us that was better than any of the competitive offers by far”.?

We can expect to see it go live around November, according to Penn CEO Jay Snowden, just in time for Thanksgiving.?

We’ll get onto the week’s packed news roundup further down, after we’ve road-tested a few jokes.?

iGB Diary: Buggin’ out, and back it up!

Happy Friday igamers! This week the Diary catches up on its correspondence, … , and uses a no-no word.

Buggin’ out

It’s with a heavy heart the Diary found itself the victim of a horrifying verbal assault.?

An industry executive that found themselves in hot water recently decided to take time away from their busy schedule to get in touch. ‘Grub’ the subject line of their email read.

The body copy? “You little grub.” Lovely.

After a brief period brooding over the beautiful Hemingway-esque simplicity, the Diary took a deep breath and got on with its day. After all, it’s better to be a grub than to be grubby.??

Back it up!

We have all heard of a Freudian slip (it’s when you say one thing when you mean your mother). But what about the equally exciting regulatory slip?

For the uninitiated, this is when you forget the exact flavour of corporate jargon you’re supposed to be reeling off, and just say the next word that comes naturally.

This week one senior executive came out with a bit of a belter on an operator’s first half financial results call.

Perhaps bleary eyed after an all-night prep session, the intrepid exec made a big boo-boo. Instead of using the preferred lingo of “regulatory settlement” (as industry hacks will be all too aware), he used the big no-no word. Yep, he called it “a fine”.?

This entirely human and understandable momentary lapse in judgement is the kind of thing that leads to frosty emails from the compliance team and a stern dressing down from general counsel.

Luckily they immediately corrected themself and it seems no harm no foul, but you can bet they might be on the sub’s bench for the next match.

That’s your lot! Same time, same place, next week!

The week on iGB

Everyone and their subsidiary published Q2 and half-year results this week, and we’ve rounded up Wednesday and Thursday’s numberwangs here, for you to browse at your leisure.?

But if ESPN Bet wasn’t big enough for you, how’s Entain setting aside ￡585m to settle the taxman’s investigation into its erstwhile Turkish business look? Yes, negotiations over the deferred prosecution agreement with the Crown Prosecution Service agreed in May look to be reaching a conclusion. The ￡585m will be paid over four years, the operator predicts, though remains subject to a judicial review. This all stems from Section 7 of the 2010 Bribery Act, suggesting individuals or employees may have placed bribes for the company’s benefit. This agreement, it’s worth noting, covers the business - what this means for certain former executives is already the subject of industry chatter.

The fine is eye-wateringly big, and far beyond the rumblings of a ￡300m penalty iGB heard previously. But whether this causes any regulatory blowback remains to be seen - the operator has a new name, a new place of corporate control and a much different corporate structure. “The Entain of today bears no resemblance to the GVC of yesterday,” chairman Barry Gibson said.?

Could Brazil be facing another twist in its sports betting saga? We certainly hope not, but after it was bypassed by President Lula through the Provisional Measure, Brazil’s Congress could be ready to strike back. A wave of amendments were filed by legislators - 244 in total - including higher tax rates, a ban on advertising and one slightly hopeful amendment to reduce the tax burden on operators. Assuming the legislation makes it through Congress, local legal expert Neil Montgomery doesn’t expect any legal bets before 2024. If you want more on the market, and can speak Portuguese, watch this week’s webinar, in partnership with Sportingbet. We’ll have a version with English subtitles up very soon - stick your email here and we’ll tell you when it’s live.

Brazil, for those old and grey enough to remember, originally planned to issue licences through a tender process, something with a chequered history in the gambling industry. We’ve had another tender run aground this week, after it emerged 888 actually pulled out of the Delaware Lottery’s igaming selection process back in May. While it supplied powered the lottery’s igaming product for the past decade, a lack of communication, big asks - including products that aren’t yet legal - and hefty costs prompted it to step back. That sets the stage for Rush Street Interactive, the only remaining bidder, to take over.

And we round off the news with a bit more drama, after Aristocrat revealed it was the victim of a hack earlier in the year. Employee information and other data was stolen, and later posted online. The supplier has taken action and informed law enforcement. “We will continue to manage this incident proactively and comprehensively, in the best interests of our people, business and other stakeholders,” it said.

Now to long form, starting with Rich Roberts at Mohegan Digital. The first time I interviewed Rich was back in 2012, just before a massive snowstorm, and the same day Celtic beat Barcelona in the Champions’ League. Since then he’s build an impressive career in igaming, taking a key role in driving Mohegan’s igaming operations. He talks tribal gaming, integrating online into an in-person business and his career to date.

Maris Catania of SG:Certified then dug into markers of harm for online poker. Now poker is generally considered a lower-risk vertical but as Maris writes the immersive nature of the game can become harmful. It’s the ‘Tetris effect’, she writes. Just as people started to slot coloured blocks together in their heads, players do the same with poker.?

That’s all from us this week. We’ll be back next week with the industry’s best news, views and analysis.?

Have a great weekend!